BIPIEMME GROUP RESULTS AS AT 31 DECEMBER 2015 APPROVED 1 DIVIDEND PROPOSAL: 0.027

Transcription

1 BIPIEMME GROUP RESULTS AS AT 31 DECEMBER 2015 APPROVED 1 NET PROFIT: MILLION, +24.4% Y/Y DIVIDEND PROPOSAL: NORMALISED NET PROFIT 2 : MILLION, +83.4% Y/Y GOOD TREND IN CORE REVENUES 3 : +4.1% Y/Y: NET INTEREST INCOME: +0.8% Y/Y NET FEES AND COMMISSION: +8.9% Y/Y OPERATING COSTS DOWN ON A LIKE-FOR-LIKE BASIS 4 : -0.7% AND +1.3% Y/Y NORMALISED 2 SIGNIFICANT REDUCTION IN COST OF RISK: 100 BPS (-32 BPS Y/Y) GOOD TREND IN VOLUMES: CUSTOMER LOANS: +6.6% Y/Y, WHICH PUTS BPM AMONG THE BEST PERFORMERS (BANKING SYSTEM: +0.5% 5 ) NEW RETAIL MORTGAGES +72% Y/Y DIRECT FUNDING: +2.1% Y/Y (BANKING SYSTEM: -0.6% 5 ) EXCELLENT AUM PERFORMANCE: +16.9% Y/Y NET NPES ON TOTAL LOANS 10.6% DOWN FROM 11,2% AS AT DECEMBER 2014 NET BAD LOANS ON TOTAL LOANS 4.4% (BANKING SYSTEM: 4.89% 5 ) DECREASE IN NPE INFLOWS -33% SOUND CAPITAL RATIOS, THOUGH THEY DO NOT YET BENEFIT FROM THE POSITIVE EFFECTS FROM THE ADOPTION OF AIRB MODELS: COMMON EQUITY TIER1 RATIO % COMMON EQUITY TIER1 RATIO FULLY PHASED 12.21% 1 The balance sheets and consolidated balance sheets will be approved by the Management Board on 23 February Net of non-recurring items. 3 Net Interest Income + Net Fees and Commission. 4 In order to obtain a like-for-like comparison, the ordinary and extraordinary contribution to the Single Resolution Fund (SRF) and the ordinary contribution to the Deposit Guarantee Scheme (DGS), which have been applied for the first time starting in 2015, have been deducted. 5 Source: ABI monthly outlook. 6 The figure includes the part of the profit as at 31 December 2015, according to current laws. 1

2 LOW RISK PROFILE: NPE COVERAGE: 39.6% (+110 BPS Y/Y) TEXAS RATIO % LEVERAGE RATIO 7.67% Main P&L results: Net Interest Income: million, +0.8% y/y; Net fees and commission: million, +8.9% y/y; Operating income: 1,667.2 million, +2.8% y/y; Operating costs: +4.7% y/y, down on a like-for-like basis 8-0.7% y/y (normalised operating costs +1.3% y/y); Net profit for the period: million vs million as at December 2014; Normalised net profit 9 : vs million as at December Main balance-sheet results: Direct customer funding: 37.6 billion, +2.1% y/y; Core funding 10 : 24.5 billion, +9.0% vs. 31/12/2014; Customer loans: 34.2 billion, +6.6% vs. 31/12/2014; Sound short-term and mid-term liquidity positions; 2015 cost of risk: 100 bps, -32 bps vs. December Milan, 8 February In today s meeting, the Management Board of Banca Popolare di Milano examined and approved BPM Group s results as at 31 December During 2015 the Italian economy started to grow again: 2015 GDP is expected to have been +0.7% (Source: Prometeia) and there were some clear signs of a recovery in the main macroeconomic indexes. Interest rates - due also to the effects of the ECB's Quantitative Easing programme - were negative throughout the year; the average 3- month Euribor rate in December 2015 was -0.13%. In this context, Bipiemme Group's core operating trends during 2015 were good. In particular we point out: P&L Results: the positive trend in operating revenues (+2.8% y/y), thanks to the good performance in net interest income (+0.8%) and the excellent trend in net fees and commission (+8.9%). We also highlight the lower cost of risk (-32 bps); Balance-sheet results: the positive trend in customer loans (+ 2.1 billion vs. December 2014, million q/q); excellent trend in AuM (+ 3.0 billion vs. December 2014 and million q/q); the increase in core funding 10 and, in particular, sight deposits (which recorded billion vs. December 2014; million q/q); 7 Texas ratio: net NPE / (capital + reserves intangible assets) 8 See note No Net of the non-recurring items 10 Current accounts + savings deposits + other technical forms. 2

3 the group's robust liquidity position, as highlighted by the significant amount of unencumbered eligible securities, above 5 billion, and the net spot liquidity balance, ~ 5.7 billion 11 ; excellent capital ratios: at the end of 2015, the bank's "Own Funds" totalled 5.0 billion and the Common Equity Tier 1 ratio was 11.53%. BALANCE SHEET RESULTS AS AT 31 DECEMBER 2015 Direct customer funding and securities issued Direct customer funding (amounts due to customers, debt securities issued and financial liabilities at fair value) totalled 37,602 million, up both y/y (+2.1%) and q/q (+ 1.7%). Specifically, "amounts due to customers" ( 28,623 million) increased by 3.3% y/y, mainly due to the increase in current accounts and savings deposit accounts (+9.1%). "Debt securities issued" totalled 8,849 million, -1.5% y/y, mainly due to the following actions: the issue of two covered bonds for 1 billion in September 2015 and 0.7 billion Covered Bond in December 2015 against the redemption of a covered bond in November 2015 for 0.9 billion; the redemption of some retail bonds for a total of 0.6 billion; the buy-back of bonds for a nominal value of 458 million (o/w 358 million for the buy-back of retail bonds); the decrease in subordinated liabilities for a total of 633 million, due basically to a subordinated bond that matured (Lower Tier 2) and the early reimbursement of the Preferred Securities issued by BPM Capital I. BPM's market share of the funding market at the end of November 2015 was 1.62%, vs 1.61% as at December Indirect customer funding Indirect customer funding as at 31 December 2015 totalled 34,060 million, up +4.4% vs December 2014 and +0.9% q/q. The increase was basically due to the brilliant performance recorded by AuM, 20,901 million (+16.9% y/y) due to both the positive market trend and the positive net funding in the year of 2.6 billion. Specifically, "funds" increased by 2,314 million (+22.5%) y/y, as did "insurance reserves", which posted million (+14.6%). "Assets under custody" as at 31 December 2015 totalled 13,159 million, down y/y (- 10.7%), mainly due to customers ongoing preference for AuM products. Customer loans Customer loans as at 31 December 2015 totalled 34,187 million, up y/y (+6.6%) and vs. September 2015 (+2.4%). The result puts the Bank among the best performers with above-the-average values (average banking system+0.5% y/y 12 ). The increase in customer loans was due to: 1) the positive trend in the household sector 13. Indeed, we point out that in 2015 new mortgages issued increased by +72.0%; 11 Weekly liquidity position as published on 3 February Source: ABI monthly outlook. 13 Management data by customer segment calculated using figures at the end of the period 3

4 2) the positive trend in the corporate sector (+6.2%) driven particularly by the wholesale commercial sector (+10.7%) and manufacturing (+9.2%) against a decrease in the real estate sector. The group's market share of the loans market at the end of November 2015 was 1.94%, up vs December 2014 (1.83%). Credit quality: the group's credit quality showed some signs of improvement which was reflected in the q/q decrease in gross NPEs, after the growth in gross NPEs had already slowed down in the previous three quarters of The improvement was due to the group's prudent approach in its loans policies and to the gradual, albeit slight, improvement in the Italian economy, which was helped by the low oil price, the still favourable exchange rate and the ECB's liquidity injection. We point out the decrease in inflows to NPE (-33% y/y). The group's gross NPEs totalled 5,997 million, up y/y (+2.5%), but down q/q (-2.3%). Specifically, a q/q analysis shows: - bad loans decreased (-1.9%) thanks to the disposal of some positions and to a general slowdown in the growth in bad loans in the previous three quarters of 2015; - a slight decrease in the item "unlikely to pay" (-0.3%), in line with the trend seen during the year (-1.4% y/y); - a strong decrease in "past-due" q/q (-41.1%), which confirmed the yearly trend (-33% vs December 14). Furthermore, gross NPEs on total loans decreased to 16.3% in December 2015 (from 16.9% in December 2014) while net NPEs on total loans was 10.6% (from 11.2%). The decreases were caused by the slowdown in the growth of NPEs, on the one hand, and by the increase in performing loans, on the other hand. The domestic data on the banking sector (source ABI data as at November 2015) highlight that the weight of net bad loans on total loans was 4.89%, up from 4.64% as at December The figure for Bipiemme Group improved compared with the average for the whole banking sector (4.4% in December 2015). The total coverage rate on NPEs is now 39.6%, up by 10 bps vs September 2015 and by 110 bps y/y. When we take the cancellations into consideration, the coverage rate of NPEs is 44.5%. The coverage rate for single items in December 2015 is still at a significant level: bad loans: 54.5% vs 55.9% in December 2014; the slight decrease was due to both the disposal of bad loans, with a significant coverage rate, and to the entrance of some positions backed by real guarantees; unlikely to pay: 22.1%, +172 bps y/y; past-due: 9.3%, +90 bps y/y; When we take into consideration the cancellations on single positions, the coverage rate on bad loans is 60.8%. The coverage rate on performing loans is 0,60% (vs 0.64% as at September 2015), slightly down due to the improvement in the quality of the performing loans portfolio and to the increase in customer loans. The group's net equity as at 31 December 2015 was 4,627 million, up vs September 2015 (+0.4%) and y/y (+2.0%). 4

5 The Common Equity Tier 1 ratio 14 was 11.53% and the Common Equity Tier 1 Basel 3 fully phased was 12.21%. Risk weighted assets totalled 35 billion. P&L RESULTS Total Income Bipiemme Group s total income as at 31 December 2015 was 1,667 million, up 2.8% y/y, mainly due to core revenues 15 of 1.4 billion, +4.1% y/y. Specifically, net interest income was million (+0.8% y/y), thanks to commercial interest income (+1.3%), which was driven by the growth in loan volumes and the almost no change in the spread between lending interest rates and deposit interest rates. Moreover, we highlight the lower cost of interbank and wholesale funding, which partially offset the lower contribution from the parent bank's securities portfolio ( million). "Non net interest income" ( million) increased by 4.8% y/y. This increase was driven by the significant increase in net fees and commission ( million, +8.9% y/y) and the profit from investments valued at net equity (+ 9.7 million). The contribution from financial activities was slightly lower (- 6.8 million) though it was still significant ( million). This result included the effect of some non-recurring items such as the disposal of a quota in ICBPI (+75.4mln), the write-down of a subordinated bond issued by Banca Etruria (- 25mln) and the buy-back of a retail bond ( mln). Operating costs The operating costs as at 31 December 2015 totalled 1,019.8 million, +4.7% y/y due to the increase in other administrative expenses (+16.1% y/y). The result was impacted by certain non-recurring items and by some items that did not exist before 2015, basically represented by the ordinary contributions to the DGS 16 and to the SRF 17, and to the extraordinary contribution to the SRF for the fund to rescue the four Italian banks 18. On a like-for-like basis 19, the group's operating costs decreased by 0.7% y/y. Specifically, staff costs as at 31 December 2015 totalled million, basically flat y/y, and included the variable components and the charges to adjust the early retirement plan Fondo di Solidarietà. Net of these components, the item was down 1,4% thanks to the lower payroll cost, a consequence of the departure of people who had signed up to the early retirement plan Fondo di Solidarietà (715 people have left the group under the plan since it came into force, of which 132 in 2015). Other administrative expenses totalled million (+16.1% y/y). This increase was driven by: 14 Includes the amount of profit as at 31 December 2015 calculated in compliance with current regulations. 15 Net interest income + net fees and commission. 16 Deposit Guarantee Scheme 17 Single Resolution Fund 18 By way of its provision dated 21 November 2015, as approved by the Economic and Finance Ministry with Law Decree dated 22 November 2015, the Bank of Italy started a plan to rescue the following banks: Banca delle Marche, Banca Popolare dell'etruria e del Lazio, Cassa di Risparmio di Ferrara, Cassa di Risparmio della Provincia di Chieti, all of which are in administration. 19 See note 4. 5

6 - the new ordinary contribution to the DGS 20 and to the SRF 21 (totalling 19.1 million); - the one-off contribution ( 39.7 million) paid into the SRF 17 to rescue the four Italian banks 22. Net of the foregoing, the other administrative expenses as at December 2015 were below the Business Plan target for Net adjustments on tangible and intangible assets totalled 74.8 million, stable y/y. The cost/income ratio on a like-for-like basis 23 was 57.2% (-2.0 p.p.). Provisions, adjustments and other items Net adjustments on loans and other operations as at 31 December 2015 totalled million, below the million recorded at the end of The cost of risk was 100 bps (vs. 132 bps at 31 December 2014). Net provisions for risks and charges were positive at 10.8 million thanks to, among other things, the write-back of the quota ( 17.4 million) exceeding the provisions for disputes arising out of the now closed mandatory convertible bond Prestito Obbligazionario Convertendo BPM 2009/ %, ended in Profit from equity and other investments "Profit from holdings and investments" totalled 37.4 million, down y/y (- 67 million), though the 2014 figure included a capital gain from the disposal of a stake in Anima Holding of million. The December 2015 figure includes the higher net equity value of Selmabipiemme Leasing ( 38.8 million) following the merger with the subsidiary Palladio Leasing. Net result After booking about 63.5 million for taxes (tax rate 18.0%), the group's profit was million vs the net profit at the end of If we disregard the non-recurring items, the net profit for 2015 was million, a significant increase compared with the million at the end of 2014 (+83.4%). Dividend The good results posted in 2015 and the sound capital position allowed the management board to propose a dividend of which will be collectable as of 25 May Banca Popolare di Milano's shares will be quoted ex coupon as of 23 May Prospects for the current financial year The economic outlook for Italy is that 2016 GDP will grow by 1.2% 24. As far as the banking sector is concerned, direct funding is forecast to decrease slightly, the bond component will decrease against an increase in deposits. As far as customer loans are concerned, it is estimated there will be an increase in loans to households and to nonfinancial corporates. 20 Deposit Guarantee Scheme 21 Single Resolution Fund 22 See note See note Source: ABI monthly outlook. 6

7 Given this backdrop, Bipiemme Group's activities will continue along the current path in compliance with the guidelines set in the Business Plan. The commercial business strategy will continue to be honed to improving the group's territorial foothold and the level of its services to its customers, with particular attention to multichannel banking and credit brokerage which, thanks to the sound capital base and the liquidity, should lead, particularly in the Corporate segment, to an increase in volumes consistent with 2015, despite the stronger competition. As regards retail funding, the bank envisages it will continue to shift from maturing liabilities to sight deposits and increase wholesale funding. The low cost of funding will help to limit the reduction in the spread between lending interest rates and deposit interest rates, which is expected to get tighter due to the ECB s monetary policy. Under non-net interest income, net fees and commission ought to post good results thanks to the positive trend in AUM, the increase in loans and the effects of the economic recovery on banking services. The tight control on operating costs and risks will continue to be an important lever to maintaining profitability. The new development initiatives will be addressed to pursuing better efficiency, productivity and organisational simplification. Parent bank The key profit and loss and balance sheet figures for the parent bank, Banca Popolare di Milano S.c.a r.l., are as follows: Direct funding 36,184 million euros (+0.3% vs ) Customer loans 33,474 million euros (+6.1%) Indirect funding 31,838 million euros (+4.1%) Total income 1,535.0 million euros (+3.6%) Operating costs million euros (+4.6%) Operating profit million euros (+2.0%) Net profit million euros (+7.4%) *** Mr Angelo Zanzi, as the manager responsible for preparing the bank s accounts, hereby states, pursuant to Article 154 bis, paragraph 2 of the Testo Unico della Finanza (the Consolidated Finance Act), that the accounting information contained in this press release corresponds to the documentary evidence, corporate books and accounting records. *** The Management Board will approve the draft of the Parent Company s Financial Statements and the Consolidated Financial Accounts for the FY 2015 on 23 February The Supervisory Board will approve the Parent Company s Financial Statements and the Consolidated Financial Accounts for the FY 2015 on 30 March *** Bipiemme Group's results as at 31 December 2015 will be presented to the financial community at a conference call set for today 8 February at 6:00pm (C.E.T.). The 7

8 instructions to connect to the event can be found under Investor Relations on the home page of the bank s website Milan, 8 February 2016 For the purpose of providing more complete data on Bipiemme Group s Full Year 2015 results, the consolidated reclassified balance sheet and income statement, as approved by the Management Board, are herewith attached. For management reporting purposes, the results have been presented in a reclassified balance sheet and income statement, in which line items have been aggregated and reclassified in keeping with market practices in such a way as to provide a clearer interpretation of trends and performances. Please note that the original version of this press release is in Italian. In case of misunderstandings the Italian version shall prevail. For information: Banca Popolare di Milano Communication Press Office Matteo Cidda Monica Provini matteo.cidda@bpm.it monica.provini@bpm.it Investor Relations & Research Roberto Peronaglio investor.relations@bpm.it 8

9 Bipiemme Group - Balance Sheet Reclassified Assets Change A-B Change A-C (euro /000) A B C Amount % Amount % Cash and equivalents 300, , ,840 73, , Financial assets at fair value and hedging derivatives 11,416,540 11,965,118 11,887, , , Financial assets held for trading 1,797,874 1,832,200 1,921,518-34, , Financial assets designated at fair value 75,543 80,854 97,449-5, , Financial assets available for sale 9,491,248 9,947,242 9,670, , , Hedging derivatives 40,638 91, ,460-50, , Changes in fair value of hedged items (+ / -) 11,237 13,649 20,107-2, , Loans and advances to banks 1,224,717 1,287, ,777-62, , Loans and advances to customers 34,186,837 33,401,500 32,078, , ,107, Fixed assets 1,199,459 1,167,942 1,117,879 31, , Non-current assets (or disposal groups) held for sale and discounted operations 0 6, , n.a Other assets 1,875,033 1,459,941 1,879, , , Total Assets 50,203,300 49,515,033 48,271, , ,931, Liabilies and Shareholder Equities Change A-B Change A-C A B C Amount % Amount % Due to banks 4,839,439 4,550,638 3,318, , ,520, Due to customers 28,622,852 28,577,221 27,702,942 45, , Debt securities in issue 8,849,290 8,281,217 8,981, , , Financial liabilities and hedging derivatives 1,379,948 1,450,858 1,690,396-70, , Financial liabilities held for trading 1,183,557 1,256,371 1,463,445-72, , Financial liabilities designated at fair value 129, , ,116-2, , Hedging derivatives 48,678 43,438 58,751 5, , Changes in fair value of hedged items (+ / -) 18,086 18,513 16, , Other liabilities 1,429,895 1,568,866 1,501, , , Provisions for specific use 434, , ,975-24, , Share capital and reserves 4,338,440 4,404,959 4,304,390-66, , Minority interests (+/-) 19,974 19,816 19, Net profit (loss) of the period (+/-) 288, , ,293 86, , Total liabilities and Shareholder Equity 50,203,300 49,515,033 48,271, , ,931,

10 Bipiemme Group - Balance Sheet Reclassified - quarterly evolution (euro /000) Assets Cash and equivalents 300, , , , , , , ,900 Financial assets at fair value and hedging derivatives 11,416,540 11,965,118 11,715,087 12,780,251 11,887,806 11,959,086 11,434,356 10,941,852 - Financial assets held for trading 1,797,874 1,832,200 1,824,944 2,284,325 1,921,518 1,954,084 1,712,025 1,587,646 - Financial assets designated at fair value 75,543 80,854 81, ,443 97, , , ,542 - Financial assets available for sale 9,491,248 9,947,242 9,632,210 10,208,114 9,670,272 9,662,753 9,336,110 8,969,488 - Hedging derivatives 40,638 91, , , , , , ,081 - Changes in fair value of hedged items (+ / -) 11,237 13,649 14,544 21,872 20,107 17,332 15,196 12,095 Loans and advances to banks 1,224,717 1,287,592 1,162,731 1,050, ,777 1,562,185 1,849,987 2,254,757 Loans and advances to customers 34,186,837 33,401,500 33,483,029 32,600,377 32,078,843 32,095,916 32,520,786 32,821,420 Immobilizzazioni 1,199,459 1,167,942 1,156,028 1,127,543 1,117,879 1,099,811 1,099,688 1,085,101 Non-current assets (or disposal groups) held for sale and discounted operations 0 6,118 6, ,596 Other assets 1,875,033 1,459,941 1,561,095 1,541,504 1,879,666 1,519,517 1,627,113 1,544,831 Total Assets 50,203,300 49,515,033 49,308,272 49,309,633 48,271,811 48,468,810 48,780,872 49,025,457 Liabilies and Shareholder Equities Due to banks 4,839,439 4,550,638 4,494,906 4,171,724 3,318,564 3,792,622 4,313,017 6,015,928 Due to customers 28,622,852 28,577,221 28,777,043 27,589,895 27,702,942 26,979,219 26,812,018 26,025,446 Debt securities in issue 8,849,290 8,281,217 7,867,754 8,677,218 8,981,834 9,271,996 9,316,712 9,503,147 Financial liabilities and hedging derivatives 1,379,948 1,450,858 1,543,437 1,981,271 1,690,396 1,716,900 1,544,651 1,477,065 - Financial liabilities held for trading 1,183,557 1,256,371 1,326,834 1,746,892 1,463,445 1,491,342 1,321,381 1,240,546 - Financial liabilities designated at fair value 129, , , , , , , ,224 - Hedging derivatives 48,678 43,438 44,092 58,053 58,751 57,102 45,742 30,833 - Changes in fair value of hedged items (+ / -) 18,086 18,513 14,809 14,567 16,084 17,883 19,682 21,462 Other liabilities 1,429,895 1,568,866 1,650,859 1,686,438 1,501,993 1,622,393 1,777,531 1,645,410 Provisions for specific use 434, , , , , , , ,693 Share capital and reserves 4,338,440 4,404,959 4,333,508 4,613,588 4,304,390 4,328,863 4,266,963 3,732,552 Minority interests (+/-) 19,974 19,816 19,038 19,493 19,424 19,418 19,228 18,895 Net profit (loss) of the period (+/-) 288, , ,053 67, , , ,468 64,321 Total liabilities and Shareholder Equity ,203,300 49,515,033 49,308,272 49,309,633 48,271,811 48,468,810 48,780,872 49,025,457 10

11 Bipiemme Group - Reclassified Profit & Loss (euro /000) Change Amount % Net interest income 806, ,171 6, Non-interest income: 860, ,395 39, Net fees and commission income 605, ,566 49, Other operating income 254, ,829 (10,354) -3.9 '- Share of Profit (loss) on investments valued under the equity method 32,577 22,857 9, '- Net income (loss) from financial activities 181, ,572 (6,848) Other operating income/expenses 40,174 53,400 (13,226) Operating income 1,667,217 1,621,566 45, Administrative expenses: (944,978) (898,831) (46,147) -5.1 a) personnel expenses (612,382) (612,420) b) other administrative expenses (332,596) (286,411) (46,185) Depreciations and ammortisation (74,773) (74,884) Operating costs (1,019,751) (973,715) (46,036) -4.7 Operating profit 647, ,851 (385) -0.1 Net adjustments to loans and other operations (342,236) (423,839) 81, Net provisions for risks and charges 10,758 (3,545) 14,303 n.a. Profit (loss) from equity and other investments 37, ,474 (67,041) Profit (loss) before tax from continuing operations 353, ,941 28, Tax on income from continuing operations (63,512) (92,008) 28, Net profit (loss) for the period 289, ,933 56, Minority interests (1,002) (640) (362) Net profit 288, ,293 56,

12 Bipiemme Group - Quarterly Reclassified Profit & Loss (euro /000) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Ne t in te re s t in c o me 19 9, , , , , , , , No n - in te re s t in c o me : 2 6 8, , , , , , , , Net fees and commission income 154, , , , , , , ,371 - Other operating income 113,964 26,611 32,546 81,354 64,033 20,096 85,021 95,679 '- S hare of Profit (loss) on investments value d unde r the e quity me thod 8,225 5,269 7,574 11,509 6,300 4,612 6,910 5,035 '- Net income (loss) from financial activitie 100,077 10,820 12,434 58,393 38,082 5,799 65,253 79,438 - Othe r ope rating inc ome /e xpe nse s 5,662 10,522 12,538 11,452 19,651 9,685 12,858 11,206 Op e ra tin g in c o me 4 6 8, , , , , , , , 13 9 Administrative expenses: (287,722) (209,007) (220,251) (227,998) (236,376) (207,166) (236,573) (218,716) a) pe rsonne l e xpe nse s (160,339) (148,678) (148,632) (154,733) (147,232) (144,708) (168,601) (151,879) b) other administrative expenses (127,383) (60,329) (71,619) (73,265) (89,144) (62,458) (67,972) (66,837) De pre c ia tions a nd a mmortisa tion (24,067) (17,582) (16,629) (16,495) (18,612) (18,728) (19,478) (18,066) Op e ra tin g c o s ts (3 11, ) (2 2 6, ) (2 3 6, ) (2 4 4, ) (2 5 4, ) (2 2 5, ) (2 5 6, 0 5 1) (2 3 6, ) Op e ra tin g p ro fit 15 6, , , , , , , , Ne t a djustme nts to loa ns a nd othe r ope ra tions (95,925) (77,972) (94,029) (74,310) (136,633) (88,216) (113,653) (85,337) Net provisions for risks and charges 14,638 (4,972) 2,364 (1,272) (8,004) (286) 7,566 (2,821) P rofit (loss) from e quity a nd othe r inve stme nts (19) (1) 37, ,474 0 P ro fit (lo s s ) b e fo re ta x fro m c o n tin u in g o p e ra tio n s Ta x on inc ome from c ontinuing ope ra tions 7 5, , , , , , , , ,938 (17,306) (20,339) (37,805) 1,450 (3,532) (36,960) (52,966) Ne t p ro fit (lo s s ) fo r th e p e rio d 8 7, , , , , , , , Minority interests (239) (594) 115 (284) (99) (232) (397) 88 Ne t p ro fit 8 6, , , , , , , ,

13 Bipiemme Group - Reclassified Income Statement net of non-recurring items As requested by Consob in its communication number DEM/ dated , we indicte the weight of the non-recurring items on the consolidated net result (euro /000) A = B + C B C D = E + F E F Change A -D Change C -F N e t re s ult N e t inc o m e fro m no nre c urrin g o pe ra tio ns N e t inc o m e fro m re c urring o pe ra tio ns N e t re s ult N e t inc o m e fro m no nre c urrin g o pe ra tio ns N e t inc o m e fro m re c urring o pe ra tio ns valo re % valo re % Net interest income 8 0 6, , , ,171 6, , Non-interest income: 8 6 0, , , , , , ( 2 13 ) Net fees and commission income 605, , , ,566 49, , Other operating income 254,475 39, , , ,829 (10,354) -3.9 (49,643) '- Share of Profit (loss) on investments valued under the equity method 32, ,577 22, ,857 9, , '- Net income (loss) from finan 181,724 39, , , ,572 (6,848) -3.6 (46,137) Other operating income/expenses 40, ,174 53, ,400 (13,226) (13,226) Operating income 1,6 6 7, , ,6 2 7, ,6 2 1, ,6 2 1, , , Administrative expenses: (944,978) (46,641) (898,337) (898,831) (13,217) (885,614) (46,147) -5.1 (12,723) -1.4 a) personnel expenses (612,382) (6,908) (605,474) (612,420) (13,217) (599,203) (6,271) -1.0 b) other administrative expenses Depreciations and ammortisation (332,596) (39,733) (292,863) (286,411) 0 (286,411) (46,185) (6,452) -2.3 (74,773) 0 (74,773) (74,884) 0 (74,884) Operating costs ( 1,0 19,751) ( 4 6,6 4 1) ( 9 73,110 ) ( 9 73,715) ( 13,2 17) ( 9 6 0,4 9 8 ) ( 4 6,0 3 6 ) ( 12,6 12 ) Operating profit 6 4 7,4 6 6 ( 7,3 52 ) 6 54, ,8 51 ( 13,2 17) 6 6 1,0 6 8 ( 3 8 5) ( 6,2 50 ) Net adjustments to loans and other operations Net provisions for risks and charges Profit (loss) from equity and other investments (342,236) 0 (342,236) (423,839) 0 (423,839) 81, , ,758 21,915 (11,157) (3,545) 0 (3,545) 14,303 n.a. (7,612) ,433 (1,422) 38, , ,474 0 (67,041) ,855 n.a. Profit (loss) before tax from continuing operations Tax on income from continuing operations Net profit (loss) for the period 3 53, , , , , , , , (63,512) 15,731 (79,243) (92,008) (682) (91,326) 28, , , , , , , , , , Minority interests (1,002) 101 (1,103) (640) 3 (643) (362) (460) Net profit 2 8 8, , , , , ,715 56, ,